In the third part of a series on boosting American manufacturing, we explore a proposal to create a series of industry-focused universities intended to increase competitiveness through advanced research and manufacturing-specific education.

The manufacturing sector has faced severe challenges in recent years. Over the past decade, the U.S. economy has lost a higher proportion of its manufacturing jobs than any other industrialized nation and total manufacturing output has been stagnant. To address the country’s deteriorating global competitiveness in the wake of the recession, many states and metropolitan areas have shifted their focus onto the key drivers of economic growth: innovation and advanced manufacturing capacity.

In the third and final part of a series of policy recommendations to aid the U.S. economy, the non-partisan Brookings Institution calls for the federal government to designate 20 institutions of higher learning as “U.S. manufacturing universities,” which will revamp their engineering programs to emphasize education and experience relevant to manufacturing firms.

“As a relatively high-cost nation, the only way the United States can regain manufacturing competitiveness is through innovation and productivity, both of which are driven by engineering capabilities that are cultivated, in part, by the nation’s institutions of higher education,” Robert Atkinson, senior fellow at the Brookings Institution and co-author of the proposal, notes. “University-based engineering programs can play a critical role in supporting advanced research, particularly in areas of relevance for manufacturers, and can help train the highly skilled workforce that advanced manufacturers need.”

These manufacturing universities are intended to address the key issue of U.S. competitiveness on the global stage. As a significant amount of domestic production has shifted overseas, the engineering, product development, and technology innovation that form the pillars of U.S. manufacturing have begun to erode.

Meanwhile, countries such as China and India have sharply increased their investments into research and development, as well as boosting support for the university infrastructure that underpins their industrial workforces. Rapidly growing foreign markets have also adopted trade policies that undermine U.S. intellectual property rights and technical expertise.

To avoid losing the worldwide race for product innovation and manufacturing performance, Brookings recommends that the U.S. government dedicate $25 million per year to each of the 20 designated manufacturing universities and prioritize the applications that emerge from these learning centers when awarding National Science Foundation grants.

“Designated universities would have several responsibilities. First, they would be required to revamp their engineering programs much more around manufacturing engineering, with particular emphasis on work that is relevant to industry,” the proposal explains. “This would include more joint industry-university research projects; more training of students that incorporates manufacturing experiences through cooperative education or other programs; and a Ph.D. program focused on turning out more engineering Ph.D.s who would work in industry.”

While classroom education is crucial for developing the next generation of skilled industrial workers, much of today’s complex production, design, and engineering work can only be mastered through hands-on experience. As such, U.S. manufacturing universities would also emphasize real-world training. The doctoral coursework would be akin to high-level apprenticeships and would not allow a Ph.D. to be conferred unless a candidate first met a work requirement within industry.

The faculty would also be selected based on their work with and within the manufacturing sector as much as on scholarly publications. Business schools would focus on manufacturing issues, such as production management, and collaborate closely with engineering departments.

Brookings points to the Olin College of Engineering in Massachusetts as a possible model for the larger-scale university network. Olin recently redesigned its engineering curriculum around innovation and design solutions, within the context of direct, real-world applications, and has been widely praised by engineering firms. On a per-student basis, Olin graduates start more new businesses than MIT graduates.

In total, funding for 20 manufacturing universities would reach roughly $500 million annually, which could derive from increases in overall federal R&D budgets. While this may seem like a hefty expenditure, it’s important to note that national R&D has been underfunded for decades, and that if the rate set in the late 1980s had continued, there would be $110 billion more in financing than there is today.

An alternative would be to fund the university network through the existing National Science Foundation budget, while requiring state and metropolitan area governments to match NSF contributions dollar-for-dollar.

“In 1862, Congress passed the Morrill Act that established land-grant colleges whose mission was to promote learning in agriculture and mechanic arts. These institutions later became leaders in mechanization of agriculture, the American Industrial Revolution and the tremendous expansion of our economy in the 20th century,” Atkinson said in a related post. “Today, the challenges America faces are even more pervasive, as a wide array of nations are already ahead in the race for global innovation advantage, particularly in manufacturing. A new cadre of ‘manufacturing universities’ can be a key part of the solution.”

The previous two policy recommendations from the Brookings Institution involved the creation of a “Race to the Shop” competitive funding initiative and the establishment of a series of advanced manufacturing hubs across the U.S.